Subsidy modes, waste cooking oil and biofuel: Policy effectiveness and sustainable supply chains in China

Huiming Zhang, Lianshui Li, Peng Zhou, Jianmin Hou, Yueming Qiu

Research output: Contribution to journalArticle

39 Scopus citations

Abstract

Many countries are concerned with the waste-to-energy for economic development and societal welfare. This paper constructs a dynamic game model that, for the first time compares the incentive effects of four common subsidy modes on waste cooking oil supply for biofuel refining and sales of waste cooking oil refined products. The model considers the impact of preferential tax treatment, a raw material subsidy, a sales subsidy and an investment subsidy on the profits of biofuel enterprises and waste cooking oil recyclers. Results indicate that common approaches adopted in developed economies such as raw material price subsidies and finished products sales subsidies increase the profits of both biofuel enterprises and recyclers. On the contrary, investment subsidies, which are relatively common in some regions of China, increase the profits of recyclers, while reducing revenues achieved by biofuel enterprises. To promote the supply chain, policy should give priority to raw material price subsidies and finished products sales subsidies, and for investment subsidies, however, the government should be cautious.

Original languageEnglish (US)
Pages (from-to)270-274
Number of pages5
JournalEnergy Policy
Volume65
DOIs
StatePublished - Feb 1 2014

Keywords

  • Biofuel
  • Subsidy mode
  • Waste cooking oil

ASJC Scopus subject areas

  • Energy(all)
  • Management, Monitoring, Policy and Law

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